The luxury industry is evolving in ways never witnessed before. Synonymous with exclusivity and rarity, luxury has now become accessible, affordable, and omnipresent, to say the least. Some would appreciate getting their hands on luxury products with much ease, while others may argue, is it luxury at all? But the bigger question is, what is leading to this shift in an industry that has always zealously guarded its haloed magic? The answer lies in a multifold demographic, geographic and mindset swing that fuels new era for luxury.
Luxury has incontestably moved out of the West and exploded among a young consumer segment in Asian countries like India, China, etc. A younger demographic certainly has a new lens to view luxury and the ownership vs. access debate sparks their quest for opulence. A new mindset that is more sensitive to aspects other than buying the most expensive and exclusive items is emerging among these ‘woke’ consumers. The catch here is that newer models to attain luxury like rental, sharing, co-ownership, and secondhand satiates the desire of aspirational buyers to signal status in society and are associated with a more prominent cause and purpose: ‘Sustainability’.
Sustainability in luxury, earlier an oxymoron, has now become mainstream and is high on everyone’s minds. Secondhand has thus turned out to be a fundamental solution to environmental damage caused by the extravagant luxury industry. Consumers have realised that the fashion industry is a key contributor to the many environmental issues that the planet is facing today. They are ready to take corrective steps to counter the adverse impact of fashion by giving second life to products which can help reduce the industry’s carbon emissions by 30%.
A recent research, pegged the worldwide preowned luxury market at US$ 26 billion in 2019 and is projected to touch US$ 55 billion in 2025, indicating a CAGR of 14% between 2020 and 2025. Online revolution, rise in aspirational new-age consumers, brand consciousness and pro-environment behaviour have significantly contributed to the growth of preowned luxury fashion market. Currently, the primary categories for preowned luxury are clothing, footwear, bags, jewellery, watches and accessories, out of which the luxury watch segment comprised around 60% of the secondhand luxury market.
Preloved fashion provides a pocket-friendly option to acquaint young consumers with luxury, especially millennials and Gen Z, and resonates with their beliefs and value systems. The stigma around used fashion is fading as young consumers gravitate towards the secondhand market. These consumers are very different from their older counterparts as they care for the environment and intend to impact the planet positively. They engage with luxury resale with a larger purpose at heart. They make efforts to reduce the negative impact of their purchase choices and increase their conscious, positive impression. As a small step, increasing the lifecycle of a luxury item provides them ultimate satisfaction as they are doing their bit to reduce fashion’s footprint. Therefore, preloved luxury fashion resolves modern consumers’ dilemma between the dream to wear designer labels and their social, moral and ethical responsibility towards people and planet. According to secondhand retailer ThreadUp’s report, 66% of consumers are using thrift as a way to buy designer brands, they would not buy for full price.
Luxury reseller TheRealReal being invited to the G-20 event on climate change, is in itself a message for the world to recognise preloved luxury as a potential solution to the damage done to the planet. CEO of Paris based luxury resale platform Vestiaire Collective, Max Bittner said, “In future consumers will increasingly shun cheap clothes and favour preowned designer goods instead.” Modern consumers are buying and selling apparel and accessories on internet, resale has become an integral part of the way they think about their wardrobes.
Some conglomerates and brands have proactively adopted the alternate circular models and have partnered with established resellers like Gucci and TheRealReal, Kering and Vestiaire Collective, Richemont and Watchfinder. These luxury resale partnerships open avenues for more brands and resellers to display a circular attitude and position themselves as sustainability advocates — something which younger luxury consumers seek in brands and relate with. Strategically, this would benefit the brands in the long-term as they position themselves as sustainable in the eyes of the young generation, who are the future luxury buyers. They are sensitive toward these issues and respect brands that share their values.
Prelove democratises luxury and provides great opportunity to new-age consumers to live their dreams at fraction of prices. It is no fad but a long-lasting trend. It may look like baby steps today but must turn into a giant leap towards changing the entire ecosystem, moving forward. The sooner luxury brands acknowledge this and move toward this sustainable model, the better opportunity they have to stay relevant among future luxury consumers. Reinforcing their sustainability efforts would be just scratching the surface to turn their consumers into brand advocates and reap the benefits of customer loyalty.
